Find out why pay-per-click advertising models can really work for your business -- as long as you follow a few clear optimisation rules.

Getting the right clicks
The alterative is to start optimising your conversion ratios and the first option is to increase the percentage of web leads being achieved per click (L). This requires optimising the web page prospects arrive at and, in this example, the process of completing the web form.

While a detailed discussion of the many techniques available to achieve this is beyond the scope of this article, with better content, images and navigation, you can easily increase this value from 10 per cent to 100 per cent -- at minimal cost.

The important thing to remember is that you are not simply trying to get as many clicks as possible -- you are trying to get as many of the right clicks as possible.

Are your clicks qualified?
The next conversion optimisation option to consider is increasing the number of qualified web leads (Q) -- in other words, the ratio of qualified clicks to leads.

The best strategy here is to optimise your advert copy to be more exclusive, your landing page to be more specific to a particular target audience, and to use pre-qualification questions in the web lead form to help filter out unwanted leads.

This ratio is also a very good indication of the appropriateness of your ad copy and the ability of your pay-per-click vendor to attract the right audience.

Lowering the total cost per acquisition
Obviously, each conversion optimisation option carries risk, as well as reward. By optimising your ad copy to be more exclusive, the number of clicks (C) is likely to drop. By making your landing page more specific to a particular target audience, you might lose potential customers after the click, and by instituting pre-qualification in your web form, you stand a chance of alienating a portion of the target audience.

Despite these risks, conversion optimisation makes sense. Fewer clicks means a lower cost per acquisition and, hypothetically, fewer non-qualified people clicking through to your landing page. This, in turn, will translate into a higher conversion ratio-per-click (L) and a higher quality lead base (Q). The end result: a lower total cost per acquisition.

Once the acquisition cost is as low as it can go, it then makes sense to invest further in the pay-per-click program to increase the number of clicks to your campaign. Let's put this in perspective with an example.

Example conversion optimisation calculation
Prior to an optimisation program a company has the following results:

Conversion Ratio = 10% x 30% x 50% = 1.5%

L/C = 10% (10 per cent of all clicks result in a lead)
Q/L = 30% (30 per cent of all leads are qualified)
S/Q = 50% (50 per cent of all qualified leads result in a sale)

If each click costs £10, then each sale costs £667 (cost per click / conversion ratio).

Now consider that optimisation could easily improve the results as follows:

Conversion Ratio = 30% x 50% x 50% = 7.5%

L/C = 30% (30 per cent of all clicks result in a lead)
Q/L = 50% (50 per cent of all leads are qualified)
S/Q = 50% (50 per cent of all qualified leads result in a sale)

Each sale now costs only £133 or 20 per cent of the prior figure.

By improving Q, and, therefore, all three elements at the same time, the conversion ratio grows from 3 per cent to 15 per cent. In other words, there has been a 500 per cent improvement and you are still spending the same amount of money on your pay-per-click campaign. Same investment -- better results!

At this stage, increasing the number of clicks makes sense, as you'll convert 7.5 out of every 100 clicks you receive.

The conversion buck stops with you
Getting the best ROI from a pay-per-click online campaign involves strategic planning and an understanding of conversion optimisation. It is vital that your campaign be measurable, from the first click to the final conversion, whether it is conducted by you or outsourced to a specialist agency, but don't forget that the click is not as important as the conversion and, as a marketer, the conversion buck stops with you.

Part one of this article appeared last week. You can view this here.

John Ginsberg is product and marketing director, Ensight.